4 MINUTE READ | June 21, 2016
ANA Investigation To Force Evolution Of Agency Trading Desks
The news of the ANA investigation into agency media transparency has the industry buzzing. Industry heavyweights are claiming that that the investigation is unfair due to its broad scope and the fact that the investigation does not intend to name individuals or specific entities. Needless to say, there is definitely a transparency problem in the industry.
In a presentation at the most recent iMedia Agency Summit, I discussed the need for a return to the roots of what a trading desk intended to be. Originally, the intent of an agency trading desk was to address the fragmentation and complexity of digital media, especially the burgeoning growth of programmatic media.
The idea was to create a practice comprised of:
Specialized personnel to address the expertise demands of digital media
Specialized operations to address the complex workflow challenges of digital media
Specialized technology to maximize the opportunities in real-time optimization and data activation that programmatic media created.
Having started our specialized media group only 2.5 years ago, we saw what was going well and what was going wrong in the industry and we intended to provide our clients with a fully transparent and high value media service. It leverages all of the key tenets noted above but we leverage three guiding principles which I explore in greater detail in the presentation.
Walk transparency, don’t just talk transparency: Not only does the economic structure need to be transparent and fair to both parties, but there is tremendous effort required in providing transparency across all facets of media. Transparency requirements across publisher, exchange, geo, device, viewability and fraud percentage are incredibly challenging to tie to together in a digestable format. That is why PMG has invested significant time and dollars in our data infrastructure which processes >50M rows of data per day with an average of 33 data sources per client so that we can map all data sources down to the placement level to provide our clients with unmatched transparency.
Compensation should be fair and predictable: Our compensation model is straightforward. A static service and infrastructure fee to cover our personnel and PMG proprietary technology with pass-through costs on any required 3rd party technology. These fees are line-item transparent and static so that as media efficiencies increase, our clients pocket that performance increase to their bottom line. As an independent agency we have the ability to put all dollars to the client’s benefit as opposed to sending profit back to the holding company, especially in challenging financial times for large, traditional agencies. To the expected revelations of the ANA pertaining to kickbacks and rebates, we have set policies on accepting no media rebates of any kind and strict rules on gift acceptance by those with buying authorization to further reinforce peace of mind with our clients. These policies have been in place since the formation of our specialized buying group.
Don’t be a jack of all trades, master of none…Less is more: We hear stories of upwards of 30 platforms in use by some trading desks. While we do believe that more than one platform is required to satisfy the demands of a fragmented media space and consumer behavior, we also feel that there is a definitive “jack of all trades, master of none” behavior that can be created by adding too many platforms. As each platform carries unique nuance and capabilities, our goal is to have a few core platforms to cover the lion’s share of media needs with a few more to cover niche or emerging media opportunities. This approach also allows us to build process and technology to support platform-specific workflows. This is paramount to keeping the number of resources required to do the job at high quality to keep the value we provide at a high level and the costs fair.
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Posted by: Dustin Engel